Options Trading Insights: How to Trade Options Effectively

Introduction

  • Speaker introduces himself as John Napolitano, options instructor at Top Trading Pros
  • Options seem complicated but can be learned with time and experience
  • John has over 20 years of experience in options trading

Current Market Conditions – Bear Market Rally

  • As of November 2, 2023, market appears to be in a bear market rally
  • S&P 500 chart shows downtrend but recent strength past 4 days
  • Bear market rallies “suck people in” right before more downside
  • Wait and see approach unless S&P breaks resistance around 435
  • Anticipation is market will head lower after bear rally ends

Benefits of Options Trading

  • Options provide choices for any market condition
  • Can buy puts and calls which are bullish and bearish
  • Sideways market strategies like butterflies and iron condors
  • Bearish trades with limited risk using credit spreads

Options Education and Coaching from Top Trading Pros

  • 1 year subscription with weekly coaching call with instructor
  • Ask questions about current trades, plans, strategies
  • Discord community to share ideas with like-minded traders
  • Receive trade alerts to practice with demo account
  • Learn strategies suited to your trading style and personality

Conclusion

Hey, everybody. How are you? My name is John Napolitano. For those of you who don’t know me, I’m with Top Trading Pros.

I am their options instructor, and it is my job to teach everyone who is willing to learn and willing to be educated in the options markets. There’s a lot of pushback with options because everybody thinks they’re complicated or they’re too confusing, and I hear all this kind of nonsense. To me, that just sounds like excuses.

So I think that anything that’s worth anything in life takes a little bit of time to learn. I have over 20 years of experience in options. You don’t need to be this guru in options to learn how to trade effectively.

I have institutional as well as individual trading experience for over 20 years. So it’s my job to try to educate everybody who is willing to participate. So if you like these types of videos, please like and subscribe our channel and check out a fantastic website, toptradingpros.com.

Plenty of free content. You could subscribe to my ebook, which describes my process in a much more detailed fashion than you can get, obviously, in a YouTube video. But what I do like to do from time to time, especially when there’s kind of interesting stuff going on, is to make these videos and talk a little bit about what I’m seeing.

So right now, as I’m sitting here on November 2, 2023, the market to me is in what they call a bear rally. And I’m going to jump into my screen right now and I’m going to show you exactly what I’m talking about. And because a lot of times, psychologically, what happens is people think that, oh my God, the market’s ripping and I’m going to miss it, and so on and so forth.

And I think that’s kind of what’s starting to happen. If you look at the S P right now, if you looked at any stock chart, anyone who even knows anything about stocks or whatever, even if you don’t know anything at all, you would probably say that this chart doesn’t look that good. Current price is here, but just a few months ago, it was all the way up here, so it’s still in a downward trend.

Now the market has had one, two, three, and if you count today’s candle, four days of continued strength, that gets people fired up. It gets people kind of sucked in. And usually when people pile into something and they get sucked into something, there’s no more buyers left.

And then the market, of course, what it does is it inflicts maximum pain on people, and the market just continues along its trajectory, which is down, as you can see right here. Right? So right now it’s a wait and see for me, because unless the market decides to break this area here, which is pretty far away still, I’m using the S and P as an example. I’m just using Spy, which is the S and P 500 ETF.

If the market goes above 435 here, that’s a different story. But we’re not there yet. We’re here.

So my anticipation is we’ll probably suck some more people in today, maybe even tomorrow, because tomorrow is Friday and we will start to head lower. Now, I could be completely wrong about that, but that is what the charts are telling me. So it’s very important as a trader to separate your feelings and what you think is going to happen, what you see on the news and everything else to what’s happening in real life.

So if you look at the news right now, the ten year treasury rolled over. Powell was speaking yesterday. He was a little bit more dovish.

That made people feel comfortable to buy stocks. And there was some pretty good economic data that caused basically the Fed to say, you know what, let’s pause or maybe even think about reducing rates in the future. So there’s always this positive stuff going on in the background, but that’s just enough to kind of suck people in.

So how do you protect yourself from that? Well, keep in mind with options trading specifically, you could go in any direction. You can buy puts. You can buy calls which are bearish.

You could even do some sideways strategies. So the most important thing to realize with options, in my opinion this is why I love trading them so much, is that they give you basically the most choices. You’re able to go in multiple directions at once.

You’re able to kind of determine what you want to do. So basically, if you’re in a situation where you’re unsure as to market direction, like you see here, you can do some sideways strategies. You can do things called butterflies, things like iron, condors, and if you want to put on some bearish trades, but let’s say bearish trades without too much risk, there’s things called credit spreads, which we teach our students as well.

So basically our members sign up to a one year subscription with weekly coaching from me where they get every Tuesday night. We have a long coaching session where you could ask any question you want about your current trade situation, what’s going on with your trade plan, how to set up trades properly, what strategies to use, and so on and so forth. We have a really in depth discussion every single week.

We have a discord community where like minded people like yourself come up with ideas and share thoughts and so on and so forth. I moderate that discord channel from time to time, so I’ll be in there making comments as well. I also give trade alerts.

The trade alerts can be actionable where you’re actually trading those alerts, or you could learn from them. So what I tell students for the first time when they’re trying this out, open up a demo account and just take my trade alerts and practice them. See what works, what doesn’t.

Not just what’s making money and what’s not, but also what you’re comfortable with. What type of strategy makes the most sense for your trading style and your personality. Because the key thing to remember with options are you have lots of choices.

And that’s what a lot of these instructors really don’t get across, what they generally do, from what I’ve seen anyway on YouTube and all the stuff that I’ve seen is they’ll throw an idea in your inbox once a week. To me, that’s unacceptable. To me, what you really need to do is learn a strategy that works for you, for your personality.

And once you have an actionable plan, you will have a repeatable plan that you can use over and over again for yourself, so you never have to worry about anything. What you need after that is coaching. So that’s what we offer here at Top Trading Pros.

So please subscribe to this channel. Check out our website. Check out my ebook.

It talks all about the different strategies that I use and why I use them and how they developed over time. And also if you’re really interested, feel free to join us. The coaching sessions do require an interview.

We don’t take every single person. One of the other things that we like to do is be very specific about our community. We want to make sure our community are people who are like minded and serious about learning.

If you want free stuff, if you think it’s a get rich quick, you’re just not going to be successful in the market no matter what you choose to do. So I hope this video is helpful. Just wanted to point out what a bear trap looked like.

Again, we have unemployment data coming out in a couple of minutes, so I could be completely wrong, the market could rip, but this is what I’m seeing right now and this is how I would position myself going forward. And again, with options, you make those changes in real time. Okay, so I hope this video is helpful.

Please like and subscribe our channel. We’re going to talk about a lot of different strategies on this channel, free content, but we’re also going to again, educate the public into how options are traded properly. So I hope this was helpful and please enjoy the rest of your day and be careful out there first and foremost.

Okay? Take care everybody. Bye.

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